The book, numbering 50,000 policies, is made up of annuities, unit linked policies, whole-of-life policies book and a small amount of traditional non-participating term insurance.

The buyer, Foundation Life is a private company that is focused on the acquisition and long term prudential management of life insurance portfolios which are no longer being actively marketed.

In Januray Tower advised the NZX it s would retain the business "following an evaluation of options for divesting (it)."

It had completed a formal process with a number of interested parties and had "determined that greater shareholder value would be realised by retaining the business."

Although Tower had decided not to sell Tower Life it had "continued to receive approaches and assessed these against the potential shareholder value that could be delivered," chief executive David Hnacock said.

“Foundation Life came to us with a proposition that recognised appropriate value for shareholders,” he said.

In-coming Tower chairman David Harrison, said “the Foundation Life team is looking forward to working with the many stakeholders, including policy holders and staff, to further strengthen and improve the business.”

“There will be no changes to their existing policies under Foundation Life.”

Foundation are paying $34 million on completion of the deal, and a further $2 million payable two years after completion.